Sina Corp., which owns Weibo ("microblog" in Chinese), hopes to raise about $500 million in an IPO in the second quarter of this year, the Wall Street Journal reported, much less than the $1.8 billion Twitter raised for its IPO last year.

But in Twitter's fourth quarter, the San Francisco-based company said the growth of its users has slowed. The company averaged 241 million monthly users in its fourth quarter, up only 3.8 percent from the previous three months.

The newer Weibo, which launched in 2009, allows its 61 million daily users to send short messages publicly to others about anything from pop culture to politics, as the Chinese government tries to control online information.

While Twitter's functionality has "largely stood still" since its inception, Elliott said Sina Weibo has worked to add new features and new ways for its users to engage.

The result?

"What started as a knock-off of the popular U.S.-based microblogging service has grown into a fully-fledged social network and become the defining social site for a generation of Chinese Internet users," he said. "It's also the most popular social site among Chinese marketers, outstripping both early leaders like Renren and newer entrants like WeChat."

WeChat is a competing Chinese app that allows users to send instant messages to each other.

The market for free messaging services has exploded, with the popularity of SnapChat and other apps.

But whether these companies can sustain profitability will be seen. Sina's CEO Charles Chao said in a conference call with investors on Monday that Weibo saw its first operating profit in fourth quarter, the Journal reported.

The number of Chinese IPOs in the U.S. has slowed in recent years. In 2010, there were 40 issues, with more than $4 billion in proceeds, according to Thomson Reuters. There were 15 Chinese IPOs in the U.S. in 2011, two in 2012 and eight last year. A potential Weibo IPO would be the fourth largest Chinese company with a sole listing on a U.S. exchange.